The personal injury discount rate (PIDR) in England and Wales has been updated. The PIDR is used to determine damages awards to people with long-term injuries.
The personal injury discount rate (PIDR) in England and Wales has changed. The PIDR is used to determine lump sum damages awards to people who suffer serious and long-term personal injury.
Purpose and use
Damages may be awarded to people who have sustained serious injury through an act of negligence. The lump sum payments are intended to provide people with full and fair financial compensation for all expected losses and costs caused by their injuries.
Where part of a claim for future losses is settled as a cash amount, the lump sum is calculated allowing for the:
- period over which losses and costs are expected to be met
- assumed investment return that a claimant expects to earn on the lump sum award
This assumed investment return is referred to as the PIDR. The rate has been changed from -0.25% to +0.5% following the decision by the Lord Chancellor and will be effective from 11 January 2025.
GAD's involvement
Legislation requires a review of the rate every 5 years and that an independent expert panel, chaired by the Government Actuary, must be consulted for each review.
Credit: Unsplash
The PIDR Expert Panel's report to the Lord Chancellor sets out their advice on the PIDR determination. This advice was supported by analysis commissioned from GAD which has been published alongside this report on the Ministry of Justice webpage
